Site Mobile Navigation

This Time, the Revolution Will Be Televised

CONVERGENCE is back, but it is not what it used to be. Following its release after about five years in the halfway house for overblown business ideas, it has been swiftly rehabilitated in the form of various online-offline business ventures.

This time around, though, some fairly radical wrinkles on the theme are in the works. One notable example is Google's deal last week to acquire dMarc Broadcasting for up to $1.24 billion.

DMarc uses software to help place ads on radio, and it could conceivably do the same for Google's armada of Web ads. The deal, along with other experiments by Google to reproduce its advertisers' notices in newspapers and other print outlets, suggests that Convergence 2.0 is moving in interesting and previously undeveloped directions.

Here are two more:

What would it mean if TV shows viewed or downloaded over the Internet could be watched only by people in certain geographic areas, mimicking the network affiliate model of over-the-air television? And what if it were as easy and inexpensive for local pizza parlors to buy cable television spots as it is for them to put ads on the Internet through portals like Google and Yahoo? The ideas are being developed by small, under-the-radar outfits -- the first by a company called Decisionmark and the second by a brand-new business, Spot Runner.

Decisionmark, a private company with 35 employees, sells software for television broadcasters. One of its businesses is providing a system to the satellite broadcasters DirecTV and EchoStar Communications, allowing them to determine which local TV signals to make available to subscribers.

Under federal law, a subscriber to EchoStar's Dish Network in Decisionmark's hometown, Cedar Rapids, Iowa, for example, can receive network affiliates only from that area, because, after all, those stations own the regional rights to the networks' programming, sell advertisements against them and promote them within their own programs, such as local newscasts.

Jack Perry, the chief executive of Decisionmark, has come up with a way to limit the geographic reach of broadcast signals online, too. It is roughly similar to the way satellite companies determine where you live: by credit card billing address, although Mr. Perry adds that he can also limit a computer's access to a signal based on its Internet Protocol, or IP, address.

Mr. Perry's notion has been getting a serious hearing from television station owners who are concerned that they are being cut out of deals like ABC's sale of instant reruns of hit shows like "Lost" through iTunes and CBS's sale of "CSI: Crime Scene Investigation" through Google Video.

After all, in the complex ecosystem of television, it is the local affiliates -- many independently owned -- that drum up much of the interest in new network shows. Jim F. Goodmon, the president and chief executive of the Capitol Broadcasting Company in Raleigh, N.C., which operates five network affiliates, told me that he sees the Internet as just another method for picking up his signal, alongside rabbit ears, cable and satellite. Why not follow the viewers online, he said, so long as each station's programming stays in its own territory?

"The next thing that we're all buzzing about is this concept of selling programming to people over the Internet," said Mr. Goodmon, whose flagship station, WRAL, is the CBS affiliate in Raleigh. "If CBS wants to sell 'CSI,' we would like to be able to sell it for them -- in partnership with them -- on our Web site. I think we're in the best position to sell and promote that material on behalf of the network."

On the face of it, it's difficult to argue with that commercial logic. But even if limiting the geographic reach of content on the Internet is technologically feasible, it is ideologically contrary to one of the Web's defining principles: that it is a ubiquitous, low-cost, global distribution platform.

New gizmos like Slingbox and Sony's LocationFree are designed to allow you to tap into your hometown television signals from anywhere in the world -- and a product like Decisionmark's could theoretically frustrate them, too.

An error has occurred. Please try again later.

You are already subscribed to this email.

The big question is whether television industry constituents -- networks, affiliates, programmers, writers, even advertisers -- are better served by preserving the industry's current pecking order or by pursuing a more fundamental revamping of its business model to satisfy the "anytime, anywhere" demands of digital consumers. Expect this debate to come to a head if downloads of hit shows take off and local affiliates start losing viewers and advertisers as a result.

Whereas Decisionmark's product is designed to extend a so-called old-media market online, Spot Runner's clever premise is roughly the opposite: it uses the Web to take some of what has made the Internet the fastest-growing advertising medium and extend it back to the world of television, the biggest advertising medium.

It's also a sign of the re-energized convergence craze that you have almost certainly never heard of Spot Runner: the company is officially less than two weeks old, but has been quietly incubated with $10 million in venture capital and is the brainchild of two Internet veterans, Nick Grouf and David Waxman. (The two were co-founders of PeoplePC and the Firefly Network; PeoplePC was later acquired by Earthlink, and Firefly was acquired by Microsoft.)

Spot Runner proposes a way to buy spot advertising on local cable systems for as little as $500 per television marketing campaign -- making it competitive not only with the likes of Yahoo's offerings but also with local newspapers and the Yellow Pages and similar directories.

Perhaps most important, it takes the impetus to produce ads off of local cable companies and puts it on any small business with a Web hookup. Mimicking the way local ads are sold by services like Yahoo's Overture or Google's AdWords, small-business owners can go to www.spotrunner.com, type in what they want to spend, whom they want to reach and what they want to say.

Spot Runner acts as ad agency and media buyer: it has an inventory of commercial templates for 4,000 types of small businesses, each with several choices of off-the-shelf video clips, and it can place them into blocks of local cable time it controls.

If you are, say, a dry cleaner in Manhattan, the company has six prepared 30-second spots from which to choose; all it has to do is add your shop's details. One example from the Web site describes itself as: "A short documentary on the history of laundry. This is a fun ad showing old images of people slaving over their laundry. But now there's you."

It may not be Madison Avenue quality, but it puts you on the tube. And once a business signs up to use a particular ad in a market, it has exclusive use of it for the duration of the campaign. Spot Runner charges $350 to create and place the ad, and Mr. Grouf says the cost of time in some markets is less than small-business owners may think -- as little as a few dollars a spot.

"WE felt that the world of the Internet could be harnessed and serve local advertisers in a very efficient way," he said. "This really puts television advertising in the hands of everyone." If he is right, "Will You Marry Me, Freckle?" ads could run alongside more familiar fare from carmakers, pharmaceutical companies and restaurant chains.

By extension, these same ads could be placed on the Internet as local video-based advertising takes flight there, too.

These are, of course, just two embryonic examples among many -- and in buying dMarc, Google has shown where it is placing its bets. Figuring out the winners andlosers is undoubtedly no easier than it was the first time convergence redrew the media map. But it is certainly no less interesting.